FOR IMMEDIATE RELEASE|
WEDNESDAY, JANUARY 15, 2003
TDD (202) 514-1888
TENNESSEE HOSPITAL TO PAY UNITED STATES $2 MILLION
TO SETTLE ALLEGATIONS OF MEDICARE FRAUD
WASHINGTON, D.C.- Maury Regional Hospital has agreed to pay the United States
$2 million to settle claims that it defrauded the Medicare program from 1994 to 1999, the Justice Department announced today. Maury Regional Hospital is located in Columbia, Tennessee.
Today's civil settlement resolves allegations that Maury violated the False Claims Act by "upcoding" diagnosis codes. Upcoding is the practice of assigning diagnosis codes that are not supported by the physician's documentation in the medical record on claims submitted to Medicare in order to increase reimbursements.
Under Medicare, hospitals are reimbursed through the DRG (Diagnostic Related Groups) coding system in which hospitals assign diagnosis codes for each patient discharge and those codes determine the DRG to which a patient discharge is assigned. The government's reimbursement is then based on the assigned DRG. In this case, Maury was able to increase its reimbursements when it assigned a false, higher reimbursing diagnosis code, rather than the correct, lower reimbursing diagnosis code.
"This settlement illustrates the Justice Department's determination to recover funds that are owed to the United States," said Robert D. McCallum, Jr., Assistant Attorney General for the Civil Division. "We will continue to vigorously enforce the False Claims Act for the protection of the taxpayers and the United States government."
The allegations arose from a lawsuit filed by Ed Taylor, a former employee of Maury, under the whistleblower provisions of the False Claims Act, a federal law that allows private individuals to sue on behalf of the United States. The lawsuit was unsealed today in Nashville, Tennessee. Under the agreement, Mr. Taylor will receive $350,000 of the proceeds of the settlement.
The civil investigation and settlement were jointly handled by the Office of the United States Attorney for the Middle District of Tennessee and the Civil Division of the Justice Department with assistance from the Department of Health and Human Services.
The action is entitled United States ex rel. Ed Taylor v. Maury Regional Hospital, Civil Action No. 1-99-0100 (M.D. Tenn.).